Check Employment Status for Tax

Introduction

If you're engaging contractors or working through your own limited company, you need to determine whether the off-payroll working rules (commonly known as IR35) apply to your arrangement. HMRC's Check Employment Status for Tax (CEST) tool helps you make this decision by analysing your working arrangements and providing HMRC's view on employment status — and HMRC will stand by the result as long as the information you provide is accurate.

What is the CEST tool?

The Check Employment Status for Tax (CEST) tool is an online service that tells you how HMRC views a worker's employment status based on the information you provide about the working arrangement. The tool helps you decide:

Whether a worker should be treated as employed or self-employed for tax and National Insurance purposes
Whether the off-payroll working (IR35) rules apply to a particular contract
How changes to contractual terms or working arrangements might affect employment status

You don't have to use the tool to make employment status decisions, but it provides certainty. HMRC will stand by all determinations the tool gives, provided the information you supply remains accurate and follows HMRC guidance.

Who should use the CEST tool?

Hirers

You should use the tool if you're a business or organisation that:

Directly hires or has hired a worker
Receives services from a worker who operates through their own intermediary (such as a personal service company)
Experiences a change to an existing contract or service agreement

Workers

You should use the tool if you:

Want to check the accuracy of a determination you've been given
Provide services through an intermediary (like your own limited company) to a small-sized non-public sector client and need to make a determination under your off-payroll working responsibilities

You may also want to use the tool when your existing contract or working arrangements change.

Agencies and third parties

If you're an agency or represent workers, you can use the tool to check the accuracy of a determination you've received.

What information you'll need

Before starting the tool, you need a contract in place — an engagement cannot be classified as employment or self-employment without one.

You should know:

Details of the contract
The worker's responsibilities
Who decides what work needs to be done
Who decides when, where and how the work is done
How the worker will be paid
Whether the engagement includes corporate benefits or expense reimbursements

The tool is anonymous. HMRC records and publishes information showing the breakdown of results and the logic behind CEST, but doesn't collect any identifying details about who uses it.

If you close the tool before finishing all questions, you'll need to start from the beginning again.

What results the tool provides

The CEST tool provides one of six possible determinations:

For general employment status:

Self-employed for tax purposes for this work
Employed for tax purposes for this work
Unable to make a determination (for employed or self-employed status)

For off-payroll working rules:

Off-payroll working rules (IR35) do not apply
Off-payroll working rules (IR35) apply
Unable to make a determination (for whether the off-payroll working rules apply)

If you receive an 'unable to determine' result, the tool will provide help on what to do next. You don't need to know the worker's identity to use the tool initially — you'll still get a result. However, using the tool again when more information and the worker's identity is known may enable it to provide a definitive determination.

Using the result

After completing the tool, you can:

Save and print your answers and result for your records
Use the result as a valid status determination statement

This is particularly important for medium and large businesses and public sector organisations, which must provide status determination statements to workers under the off-payroll working rules.

When to use the tool again

You should use the CEST tool again whenever:

There has been a change to an existing contract or service agreement
The information you originally provided is no longer accurate

Changes to working arrangements can affect employment status, so it's important to reassess whenever the relationship changes.

HMRC's commitment

HMRC will stand by all determinations given by the tool, as long as the information you provide remains accurate and follows HMRC guidance. This gives you protection if HMRC later challenges the employment status, provided you can show you used the tool correctly and honestly.

If you're unable to check online, you can contact HMRC's Status Customer Service Team for assistance.

Sources

This article provides general guidance based on current HMRC rules. For advice specific to your situation, speak to your accountant.